Free Online Article Directory. For Article Authors & Publishers
The Benefits And Drawbacks - Commercial Mortgage Or A Commercial Lease For My Business?
If you are in business then one of the most daunting decisions you are likely to ever make will be to either rent or buy your business premises. Will the offices, the factory or the warehouse turn out to be your biggest asset or your biggest expense? Making the correct decision at the correct time could have a significant impact on the success or otherwise of your business.
Taking out a loan to buy commercial property may be preferable if you want to benefit from an increase in the value of the property over time or if you want a tight control over your property outgoings. Conversely, renting may be better for your company if you need the flexibility to move premises quickly as your business needs change. Whatever your plans, make sure you take the following pros and cons of buying and renting into account.
When To Rent: As a new business you'll probably not have the funding available for a commercial mortgage, as deposit payments of between 25 to 50 percent can be required. It's a totally different ball game to residential property mortgages because it's riskier for the lender. Although it's a long term investment, you need a big sum up front in the first place, which isn't easy for a business that is very young and still building their assets.
Renting rather than buying can also eliminate the issue of last minute maintenance costs. As a tenant, the landlord generally pays for maintenance costs, anything that needs fixing, redecorating for wear and tear and the costs of securing the building as well as buildings insurance, so you will have more money to build your company. Also you won't suffer so much if the market crashes like it did in recent times, but you should keep in mind that rent can still increase if the economy suffers.
Many companies buy commercial premises that are larger than they actually need. Not only does this allow for expansion of the company without moving premises but it also allows you to sublet some of the surplus space to generate valuable additional revenue.
Obtaining a Commercial Mortgage to Buy Property: The obvious point about buying a commercial property is that the building itself is an asset that appreciates in value, and with every mortgage payment the company owns more of the building. This contrasts with renting as you own nothing and every time you pay rent, the money is dead and gone.
Mortgage payments made for commercial property by a business are also allowed as an expense for tax purposes so you can actually get some money back and/or pay less tax, which of course is always a plus. For company directors, you can often also buy a property through certain pension plans, although it would be best to speak to a financial adviser before making such a decision as the process can be complicated and carries certain risks.
Renting an office or warehouse also gives you much more flexibility to relocate your firm should the need arise. You may need to move to bigger premises as your business grows or to smaller premises if you need to control your costs. Selling commercial property can be tricky, whereas breaking a rental agreement to relocate can be much more straightforward.
Renting a commercial property also eliminates many associated property costs. You won't generally be liable for maintenance, decoration and repair costs, saving your firm a substantial sum. And, renting premises means that you are not adversely affected by a slump in property prices or by large hikes in interest rates. Whilst your rent and rates may rise every year, other general economic factors will have less of an impact.
Deciding to rent your business premises or to buy with a commercial mortgage will depend very much on the specific needs of your business. Taking into account the above points will help you come to the right decision for your business.
While you purchase a home, you'll probably be making most significant purchases in your lifetime. Because buy a home is such a significant financial endeavor, you will have to keep in mind essential factors that go into shopping for a new home.
For most of us, buying a home is our biggest life investment. As a result of a new house being such a major purchase, you will have to consider all the important fundamentals about what is a must to do to buy a mortgage and get the appropriate mortgage you can afford.
Bottom line is that housing is much more affordable today than three years ago. This is causing downward pressure on inventory. Add to this that the pipe line is not being filled with new foreclosures as fast as it was even two years ago and you will see price appreciation.
It's not an easy decision to make as to whether you lease or purchase your business premises. Your company buildings such as offices, factories and warehouses may be your most expensive business venture, but they can also turn up to be the largest business investment too. It is therefore advisable to take some time to think over this huge decision.
My potential buyer was looking at the home with an eye to renovating it. She told me she would be buying this home without any financing. I almost said to her, "I can't not get you financing, you will have to buy it without something else." But I just smiled and told her that I felt sure this house would go quickly for cash. (most of our REO inventory sells for cash).
For the past three months Gail and I have been looking for a home to buy. Every few days I would check out new listings in the area we chose. We toured a few homes a week. We made an offer on a home on Wednesday. The offer was accepted. We still need to qualify for the mortgage and complete our home inspection, but I foresee no obstacles t a successful close
Here are the reasons we bought now...
During the current market environment, numerous people are looking for ways to save cash, and one avenue that is becoming very effective, is to benefit from refinancing mortgage. Home loan refinancing is basically exchanging an active loan deal and its connected interest rates with another mortgage.
Mortgages facilitate Canadians to pay for homes, lower the rate of interest on homes they previously have, and tap otherwise untouched house equity and exploit it for home improvements. Devoid of the favorable influences of mortgage loans, it would have been compulsory to buy that home with money. Home mortgages are a lot more than mere property loans.
Home mortgages are a lot more than basic property loans. With the help of refinancing, you will be able to benefit from better rate of interest, longer or shorter pay off time, or save for old age! With the help of a home equity line of credit, you can consider that spare funds for those unpredicted emergencies which come about.
The number of houses in foreclosure has escalated to more than 13 million houses across the nation. While no homeowner wants to have their property foreclosed upon by the bank, many have no other option. Mortgagors that want to avoid foreclosure have to be very proactive the second they cannot afford their loan installment.
![[Valid RSS feed]](http://www.articlelisted.com/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Marcus Selmon's Author Feed
Print This Article
Add To Favorites 